A growing number of firms that go public (e.g., IPO) are financially distressed often for several years of their initial existence, raising concerns about their ability to remain going concerns. Yet many IPOs do not receive going concern opinions (GCO) from their auditors who are charged with providing an assessment of their clients’ going concern status. A key feature of the IPOs is that a significant proportion of them are financed by venture capitalists (VCs). Unlike conventional sources of financing, such as banks, a VC offers financial as well as non-financial support to the new firm such as mentorship, strategic guidance and network access. The VC also provides monitoring as a member of the board of directors. An auditor’s assessment of its client’s going concern situation includes an audit of its financial statements and, if the client is financially distressed and in danger of ceasing to be a going concern, a review of factors that may mitigate the need for a GCO. I hypothesize that going concern opinions are assessed less often to financially distressed IPOs because the VC’s presence is viewed by the auditor as a factor that mitigates the need for a GCO. Thus, I explore whether the presence of a VC – in contrast to the presence of a banker – tempers the likelihood of issuance of a GCO to a financially distressed firm. I also explore whether varying degrees of involvement by a VC serve to mitigate an auditor’s need to issue a GCO since VCs are not all equally effective in their roles.   I find support for hypothesis (H1) that going concern opinions are assessed less often to financially distressed IPOs with venture capital backing than to those with other forms of financial backing (e.g., banker financing) and no support for hypothesis (H2) that the negative association between the presence of a VC and the issuance of a going concern opinion to a financially distressed IPO is stronger the greater the involvement of a VC. This study will inform industry regulators, concerned with transparency and the adequacy of financial disclosures, determine whether financial disclosure requirements should be enhanced to account for the presence of a VC . This study will also assist institutional and individual investors understand the risk that a VC-backed IPO may fail even when a GCO was not issued by an auditor. / Business Administration/Accounting

At the beginning of the century, major accounting scandals such as Enron led to decreased public confidence in the accounting profession. The tarnished reputation the profession suffered led to legislation in the form of the Sarbanes Oxley Act of 2002. This Act took away some of the profession's ability to self-regulate. In his speech to the 2003 Annual Meeting of the American Accounting Association, Arthur Wyatt (2003) states, "the current challenge of firm leaders has to be to gain an understanding of how current culture evolved and how best to eliminate the damaging commercial initiatives and restore proper, and expected, degree of professionalism." Wyatt also claims that the accounting profession's leaders have neglected their responsibility to the public relating to standard setting. Dr. James C. Gaa (2004) agreed that the profession did not act responsibly in terms of balancing its commercial needs with its professional obligations. This project tests these claims. Against the conceptual background of the sociology of professions, this project tests the claims made by Wyatt and Gaa that the profession did not act responsibly. More specifically, this study looks at the interests that the leading accounting firms protected in relation to the development of the controversial Statement of Financial Accounting Standard No. 123, Accounting for Stock-based Compensation. The research for this project is a rhetorical analysis examining the comment letters from the leading accounting firms regarding the 1993 stock-based compensation exposure draft and the comment letters regarding the revised stock-based compensation exposure draft of 2004. The analysis uses a qualitative coding scheme that is derived from research on the professions. The test reveals interesting results that are consistent with some of the claims of the previously mentioned authors with respect to commercialism and professionalism among auditing leaders.

The American Institute of Certified Public Accountants (AICPA) has recently added ElderCare Plus assurance services as a possible avenue for certified public accountants (public accounting professionals) to supplement their traditional accounting, audit, and tax services. The purpose of this study is to provide insight into the public accounting professionals' perceptions of this non-traditional service. Specifically, this study analyzes public accounting professionals' attitudes regarding how economic, liability, community involvement, suitability, and domain specific knowledge factors are associated with public accounting professionals' willingness to offer or consider offering ElderCare services. After studying the definitions of ElderCare, the types of problems faced by potential ElderCare clients, and the characteristics of the market for ElderCare services, I concluded that five specific factors were most likely to influence a public accounting professional's decision or likelihood to offer ElderCare services. The factors I determined to be most important are economic, liability, community involvement, suitability of service, and specific knowledge or training. This specific set of factors was chosen for two primary reasons. First, based on my study of ElderCare issues, I concluded that this service contains performance issues that may vary significantly from traditional public accounting services. Second, public accounting professionals must be concerned with the financial viability of an ElderCare assurance practice. This financial viability is a function of client base, revenue streams and potential liability. When developing the questionnaire, I applied prior research when possible. However, because ElderCare services is a relatively new concept for public accounting professionals I _developed questions utilizing publications by the AI CPA and professional journals. In order to gather survey data, I purchased a random mailing list of 2000 public accounting professionals from the AI CPA. The list consisted of members living in the United States or U.S. possessions. Of the 2000 questionnaires mailed, I received 324 responses or had a 16.2% response rate. After studying the statistical analysis, I conclude that providers in general differ from non-providers in the following: • Providers perceive the financial risk involved in offering ElderCare direct, assurance, and consulting services is not greater than traditional services. • Providers have a higher level of community involvement. • Providers have a client base amicable to providing ElderCare services. • Providers perceive ElderCare services as an extension of traditional public accounting services. • Non-providers perceive that additional training and certifications are needed to provide ElderCare services due to lack of knowledge concerning ElderCare issues. After studying the statistical analysis, I concluded that providers and non-providers generally agree to the following: • Profitability is a factor in providing ElderCare services. • Liability is not a primary issue; however, the AI CPA seems to be concerned with liability exposure. • Additional professional education is needed to provide ElderCare direct and consulting services.

In today's ever-changing society, it stands to reason that the roles of certified public accountants are changing as well. The traditional. roles of accountants have been in the areas of income tax preparation, auditing, finance, and general accounting. However, technological advancements and competition are threatening these traditional roles, thus making accountants deviate into non-traditional roles such as electronic commerce, elder care, and financial services (e.g. selling securities such as stocks, bonds, and mutual funds). CPA firms will be able to offer one-stop shopping for accounting and financial services. Based on these new roles, how will CPAs function and operate in the new millennium? This paper hypothesizes that CPAs will have to diversify. Four hundred fifty (450) CPAs from across the fifty (50) United States were sent a survey about CPA functions in the new millennium (Appendix A). One hundred fifty-six useable surveys were returned (34.67%). The results of the statistical analysis indicate that 1) CPAs somewhat agree that they will be able to keep up with a workload that is increasingly diversified, and 2) they are somewhat satisfied with the increasing possibilities of diversification. These results should be of interest to CPAs in the United States, as they perform strategic planning for their own firms.

There is little empirical research identifying the structural forces influencing the International Accounting Standards Board (IASB). The purpose of this study was to analyze the structural forces underlying international accounting regulation to contribute insights useable by the public, politicians, and scholars to conceptualize the processes of international accounting regulation. Based on stakeholder theory, legitimacy theory, and social network theory it was posited that this network is rationally created to serve certain stakeholder groups in the face of divergent stakeholder interests. The research questions for this study addressed the organizations which constituted the IASB's governance network, the professional and geographic perspectives represented, and the extent to which the governance network was structurally embedded. Social network methodology was utilized within a case study design. All data consisted of publically available existing data. Social network analysis including graphic notations, density, comembership overlap, and co-organizational overlap were employed to produce a representation of the governance network and to measure the extent to which the network was structurally embedded. To provide supplementary detail, the professional perspectives and geographic representations of the actors were measured. The results indicated that the network forms a definable hierarchy that exhibits qualities of structural embeddedness. Banking interests were more embedded within the governance network than any other professional, academic, or social group. Also, a strong Western influence was detected. The societal benefit of this effort was to engage society in general and accounting researchers in particular in hopes of encouraging diverse representation in regulatory processes with both macro and micro-consequences.

The purpose of this study is to provide evidence on the effects of the nature of accounting standards (i.e. principles- versus rules-based accounting standards) on audit quality and earnings attributes. I construct a comprehensive instrument to effectively measure rules-based characteristics in the U.S. GAAP following Mergenthaler (2011). I then construct a firm-level instrument to capture firms' reliance on principles-based accounting standards using the textual analysis approach developed by Folsom et al. (2017). Using data from S&P 500 companies during 2009-2014, I first examine whether principles- (or rules-) based standards in the FASB Accounting Standards Codification (ASC) system affect both the inputs (i.e. audit fees) and the outcomes (i.e. financial misstatements) of the audit process. The multivariate regression results show that firms applying more principles-based standards pay less audit fees but the nature of accounting standards doesn’t affect restatements. My finding suggests that auditors do consider the degree of precision and complexity in accounting standards when assessing the level of audit inputs, but audit quality is generally not compromised by the nature of accounting standards. I also investigate the influence on firms’ earnings attributes. More specifically, I examine the statistical association between firms’ reliance on principles- (or rules-) based accounting standards and the timely loss recognition (TLR) during the same sample period. Interestingly, I find that the timeliness in loss recognition is insensitive to firms’ choice of applying more principles- (or rules-) based accounting standards. The results of this study should be of interest to preparers, auditors, U.S. standards setters, and accounting researchers.

Thesis (Ph. D.)--University of Hong Kong, 2001. / Includes bibliographical references (leaves 125-131).

Dissertation Universität zu Köln, 2009.

Thesis (M. Com.)--University of Canterbury, 2007. / Typescript (photocopy). Includes bibliographical references (leaves 109-116). Also available via the World Wide Web.

Thesis (Ph. D.)--Columbia University, 1933. / Vita on p.[3] of cover. "Bibliography and notes": p. 95-98.